The giving season is here and charitable organizations big and small are contacting potential donors by mail, email and phone. For most nonprofits, year-end donations are critical, so these solicitations are designed to tug at your heartstrings.
“We want people to understand that not every appeal is right for them,” said Art Taylor, president and CEO of the BBB Wise Giving Alliance. “We like to assume, sometimes improperly, that every solicitation or every charity out there is legitimate — and that’s just not true. Some groups may have good intentions, but are not capable of fulfilling them. Some are outright scammers.”
A lot of people deal with the solicitations as they pour in. That can lead to bad decisions. A better way, experts say, is to have a charitable giving plan. Set a budget and pick your priorities.
“Once you figure out the budget and the causes you really like, then it's just a matter of figuring out which charities you need to pick,” said Eileen Heisman, CEO of National Philanthropic Trust. “Spend as much time looking for background information on a charity as you do looking for a restaurant. You can find out a lot in 10 or 15 minutes because the internet makes it so easy.”
By doing a little research, you can give wisely, avoiding the scams and giving your money to good charities that will efficiently use your donations for the causes you want to support. These three websites can help you make informed decisions:
- Give.org: This is the website of the BBB Wise Giving Alliance. It provides reports on about 1,300 national charities, as well as reports on more than 10,000 local charities from Better Business Bureau offices in the U.S. and Canada. The BBB does not rank charities, it rates them on 20 standards, including: program expenses, effectiveness, website disclosures, board oversight and donor privacy.
- Charity Navigator: Charity Navigator has information on all 1.6 million nonprofits registered in the U.S. It rates groups from zero to five stars by evaluating how efficiently a charity uses donations, how well it has sustained its programs and services over time, and its level of commitment to accountability and transparency. Charities with three or four stars either meet or exceed industry standards for financial health and accountability. The site has a list of Charities with Perfect Scores and Charity Navigator Advisories (groups that its experts have concerns about).
- CharityWatch: Founded 25 years ago as the American Institute of Philanthropy, the site bills itself as “America's most independent, assertive charity watchdog.” CharityWatch uses an A+ to F rating system that shows how efficiently a charity uses donations. Groups on the Top-Rated Charities List generally spend 75 percent or more of their budgets on programs, spend $25 or less to raise $100 in public support, and meet CharityWatch's standards for governance and disclosure.
TIP: Many states require charities to register in order to solicit. This information can be found on the websites for your State Attorney General or Secretary of State.
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EXPERT TIPS ON HOW TO GIVE WISELY
Americans are generous. Individual donations to U.S. charities totaled an estimated $287 billion last year, according to Giving USA.
While most charitable organizations are legitimate, charity fraud “takes millions of dollars a year in donations away from legitimate charities,” Tracy Thorleifson, an attorney with the Federal Trade Commission who specializes in charity fraud, told NBC News BETTER.
Just one example: A group of four bogus cancer charities shut down by the FTC two years ago — Cancer Fund of America, Children’s Cancer Fund of America, Cancer Support Services and Breast Cancer Society — were accused of bilking donors out of $187 million. The FTC said “the overwhelming majority of donations” were spent on their operators, families and friends, and fundraisers.
These five tips can help you avoid the bad actors and make smart decisions with your charitable dollars:
- Don’t respond to pressure tactics: Legitimate charities will never pressure you to give immediately. They’re happy to send information about their mission and programs. Remember: It’s OK to say no, even to a heart-wrenching appeal.
- Watch out for sound-alike names: Many charities have the words cancer, heart, veterans or children in their names. Questionable groups often choose names that sound like famous, well-known charities. Names can be confusing, so make sure you give your money to the charity you’ve chosen, not one that’s been created to fool you.
- Don’t be swayed by gifts: Direct mail solicitations at this time of year often include address labels, greeting cards or calendars. These free “gifts” tend to increase donations. You do not have to donate in order to keep these items.
- Know the warning signs of a charity scam: Avoid any solicitation that asks you to wire money or offers to send a courier or overnight delivery service to collect your donation immediately, guarantees you’ll win a sweepstakes in exchange for a contribution or asks you to honor a pledge you don’t remember making.
THE BEST ADVICE: GIVE DIRECTLY
The safest and most efficient way to put your charitable dollars to work is to avoid phone solicitations and donate directly to the charities of your choice.
“A phone call can feel like a very pressure-filled situation,” said Ashley Post, communications manager at Charity Navigator. “We encourage donors to just say, ‘thanks for calling and thanks for the information’ and then do their research if they want to give to that organization.”
Soliciting donations by phone is also very expensive, which means less of your money goes to the charity.
“Most of the money that you donate when contacted by a telemarketer is going to end up with the company that’s calling you on behalf of the charity,” said the BBB’s Taylor. “If you hear an appeal over the phone that you're interested in, go directly to the charity’s website and make a donation. That way the charity will get all the money.”
More information on charitable giving:
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